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NEW DELHI: Supreme Court on Wednesday flagged the substantial haircuts taken by creditors in proceedings under Insolvency and Bankruptcy Code (IBC) after being told how the bankrupt Reliance Communications of Anil Ambani group was bought at a throwaway price by Mukesh Ambani’s Reliance Jio.Solicitor general Tushar Mehta said, “Apropos the SC’s concern, govt of India is seriously looking into this issue arising in IBC proceedings. I cannot elaborate as I am part of that discussion. It is receiving very serious consideration at the appropriate quarter.”Advocate Prashant Bhushan told a bench of CJI Surya Kant and Justices Joymalya Bagchi and Vipul M Pancholi that Reliance Communications had outstanding dues of Rs 47,000 crore and in bankruptcy proceedings, it was sold for Rs 455 crore, that is, 1% of the outstanding amount. It was sold to his brother’s company.Senior advocate Mukul Rohatgi, appearing for Anil Ambani group, said such a sale was a public process, whether the buyer was a brother or anyone else. But the CJI-led bench said, “Unfortunately, IBC proceedings are misused nowadays. The assets of a company in debt are undervalued. Then it is put on a sham auction and, in a planned manner, a family member or a friend buys it.”The bench added, “Every day such matters are coming up before the court.” The SG said, “The haircut (suffered by creditors) is phenomenal.” Bhushan po-inted out that “surprisingly, bankruptcy is declared by the very company which is facing bankruptcy”.The CJI remarked, “It is a nice plan. Voluntarily declare bankruptcy and then get evaluated by friendly valuers at 10% of the market value. Unfortunately, the conduct of resolution professionals is not above board.”Rohatgi said instead of investigation and prosecution, the court could appoint a committee of experts that estimates the amount due from ADAG, and then the Anil Ambani group could repay that amount in instalments over a period of time. That would serve the purpose, he said.The bench said CBI and ED should investigate the matter thoroughly and get to the bottom of the case. “We will monitor the investigations, and if we find them to be slack in probing the cases, we will pass appropriate directions,” it said.
